The objectives of this section are to study the modes in which knowledge enhances innovation and to analyse how learning processes work within and between organizations. In order to understand how knowledge is transferred and how does it influence innovation, different types of knowledge are reviewed in a first subsection. Since learning processes at the macro level are related to innovation performance within organizations, a second subsection deals with the learning taking place in organizations. Finally, the topic of knowledge embodied in routines is studied in detail.

Types of Knowledge

The subject of knowledge types is broad and complex. For the purposes of this study, knowledge is understood in the form of assets, such as competences and skills (Lundvall 2004). This approach allows their identification and transferability. Furthermore, these forms of knowledge are the most important inputs of innovation (Lundvall 2004).

Following this conceptual approach, knowledge types can be classified according to several criteria. For instance, Asheim and Isaksen (2003) indicate that learning relies on different types of knowledge, such as science-based, technical skills or market information. Another approach introduced by Lam (2004) differentiates between knowledge from individuals, which is able to be transferred, and collective knowledge that represents collective norms, behaviours and forms of distributing knowledge collectively. Besides, Lundvall (2004) emphasizes the differentiation between public and private knowledge. He argues that knowledge is not entirely public or private. Indeed, not all individuals and organizations have access to public knowledge. In contrast, spillovers make private knowledge transferable.

Most of authors, however, tend to differentiate between tacit and codified knowledge (Lam 2004, Powell and Grodal 2005, Asheim and Isaksen 2003, Lundvall 2004, Jensen et al. 2007, Cooper 2006, Asheim and Gertler 2005) in order to indicate that there is a kind of knowledge that cannot be easily transferred, i.e. tacit knowledge. This basic classification can be adapted to other contexts, e.g. private and public knowledge, individual and collective knowledge, local and global knowledge, etc.

Tacit or implicit knowledge is embodied in individuals. Tacit knowledge can be transformed into codified or explicit knowledge in different ways. For instance, by communicating it, writing it down or incorporating it in artefacts. Moreover, while explicit knowledge can be generated by formal study, tacit knowledge is principally acquired through practical experience (Lam 2004). However, the complementarities between both knowledge types are more relevant than the differences between them (Jensen et al. 2007). Thus, both types are crucial in the processes of knowledge creation and transfer. The creation of new knowledge implies the use of tacit knowledge, its diffusion and its interaction with explicit knowledge (Lam 2004).

The structure of knowledge changes frequently when it is shared. For instance, tacit knowledge that is transferred between individuals is seldom transferred identically. If tacit knowledge is transformed into codified it automatically changes to a more generalized form. Similarly, codified knowledge can be transferred in the same form or be transformed into tacit knowledge.